The 1H19 performance fell short of our expectations. The company announced 1H19 results: operating income was 1,624 million yuan, up 6.2% year on year; net profit was 80 million yuan, down 12.7% year on year. Corresponding to 2Q19, revenue was 764 million yuan, up 7.6% year on year; net profit was 32 million yuan, down 34.7% year on year. A total of 2.76% of the shares were repurchased for 95 million yuan. The company's performance fell short of our expectations, mainly due to the rapid increase in sales expenses, which reduced current net profit. 1H19 business analysis: 1) Export performance was impressive, with revenue of 576 million yuan, up 25.9% year on year, and gross margin increased 8.0ppt to 28.4% year on year. Export orders to the US account for ~ 50% of the export business. The rush of orders from US customers has led to an increase in demand; the depreciation of the RMB and the decline in raw material costs have led to a sharp increase in gross margin. 2) The domestic cookware business is estimated to have declined by about 10%. 3) Robotics business revenue was 145 million yuan, +51.6% year-on-year. The revenue growth rate is at a high level in the domestic robot industry. Among them, the sales volume of in-house robots is 1,010 units, ranking among the highest in the industry. The company acquired 39% of Qianjiang Robotics's shares for 137.28 million yuan. After the acquisition, it held 90% of Qianjiang Robotics's shares. 1H19 financial analysis: 1) The overall gross margin fell by 0.9ppt to 36.7%, mainly due to a decline in the share of domestic cookware sold with high gross margin. 2) Sales expenses increased sharply by 23.1%, leading to a decrease in operating profit margin. Faced with the slump in the domestic market, the company increased investment in sales expenses, but the results were not good. 3) Net operating cash flow - 48 million yuan, mainly for export, robotics and other businesses with long account periods. Development trend The company regards the robot business as its main development direction. Currently, it is still in the cultivation period, and has not produced good financial results. Domestic cookware sales are the company's core business, and market performance needs to be improved. The profit forecast and valuation was lowered by 15%/15% of the 2019/20e EPS to $0.41/0.46 due to lower performance than our expectations. Maintaining a neutral rating, the target price was lowered by 5% to 9.00 yuan, corresponding to 22x/20x 2019/20e P/E, and there is 9% room for increase from the current stock price. The current stock price corresponds to 20x/18x 2019/20e P/E. Risk: Risk of trade friction between China and the US; risk of falling domestic market demand.